RegTech to disrupt Investment Management Industry 

 

As we are celebrating the 8th birthday of FundApps this year, we look back on how things have progressed since our founder and CEO, Andrew White, started coding from a South London bedroom to now, as we have just joined the Investment Association’s (IA) FinTech membership category.

 

Back in the beginning of 2011 we wrote a blog post about ‘SaaS’ and called ‘Cloud Computing’ sexy. With financial service institutions as our target audience, explaining about ‘the cloud’ was one of the first things we did, as part of their “build vs buy” decision. The traditional model of having software installed locally (build in-house or bought from a third party) comes with several disadvantages; it’s a pain for organisations when it comes to upgrading to the latest version and there is a need to buy multiple licenses and hire full-time staff to monitor the system. Andrew came across these issues at his previous work place and this is how FundApps was started; by offering a third solution that provides a forward looking, cloud-based software-as-a-service.

 

With a slick and fast front-end and the rule engine back-end to do the heavy lifting, FundApps makes compliance simple by automating regulatory reporting for compliance professionals. Over the years our Shareholding Disclosure service has expanded, adding Short Selling rules, supporting Takeover Panel reporting and fund aggregation etc. But we do more that ‘just’ that, we are a true RegTech – we combine technology with content to bring together compliance professionals, we give back to our local community and we help make the financial service industry more transparent.

 

Community

A steadily growing number of clients select us after a diverse range of due diligence processes, ranging from having multiple rounds of RFPs and Security checklists through to requesting to talk to a current client using the FundApps Platform. In August we signed 7 new clients, the same number of clients we signed for the whole 2014. That in itself is a good indicator of the readiness of the industry (including banks, hedge funds, investment managers and pension funds) to find a way to automate their regulatory compliance reporting.

 

“It’s great to see the community come together over the years”, says Andrew White, CEO. “Even though overhauling legacy systems and removing manual processes are key strategic priorities for the industry, the importance of increasing accessibility and accuracy of data to support the front, middle and back office is up there in the top 3”.

 

Our membership to the Investment Association will allow us to interact with even more investment management firms and help them avoid fines and reputational damage, prove adherence to regulation, and manage shareholding disclosure efficiently. Also, our very recent submission to become a b-corp allows us to improve in many areas, impacting our people, clients, industry and society as a whole.

 

Transparency

The FundApps Rule Commentary feature provides a platform for our users to talk to each other, to discuss rule interpretations and to check “what others are doing”. Having a transparent platform to talk to industry peers brings transparency and confirmation, there’s strength in numbers! Our content team manages the community and also keeps up-to-date with new regulations or adds new jurisdictions to our Shareholding Disclosure service, we’re now up to 95 jurisdictions.

 

Today, ever increasing regulatory complexity and daily change means established investment firms struggle to manage operational risk and efficiency, whist new investment managers are simply locked-out of the market. Compliance is broady regarded as a necessary evil without significant business advantage. Our mission has just begun!

 

Head of Content, Karl Schindler, comments “we’ve been in touch with the IA over the last few years and are very excited to now join under the FinTech category. As a former compliance officer in the asset management world, I can attest to the benefits that the IA provides to its members and am looking forward to what’s ahead as a FinTech member. FundApps’ ethic of ensuring that those in compliance roles can discuss and share regulatory obligations fits squarely within IA’s goal of supporting its members by working actively with policymakers and other stakeholders.”

 

We’re responding to the regulatory challenge by leveraging our core competencies, not only to make compliance simple, but also through product innovation, to make compliance more useful, adding new insight and value to our clients’ investment decisions and processes.

 

Two recent examples of this are the new ‘Automated Community Denominator Check’ and ‘Room-In-A-Name’ features. The first utilises FundApps’ Client Community to highlight differences between the Denominator values (e.g total shares outstanding, total voting rights etc.) uploaded by customers. This allows FundApps clients to quickly identify, investigate, and rectify errors – promoting confidence in the data behind their disclosure results and satisfying regulatory obligations for ensuring data quality. The second ensures compliance and front-office teams are connected and that both understand exactly how much they can trade in an issuer before reaching the next reportable threshold (hence the name: Room-In-A-Name).

 

To find out more about FundsApps, please click here.